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To: Zorro who wrote (4856)	3/26/1998 11:44:00 AM
From: Zorro	Respond to of 5812

Airwave auction bids top half billion dollars Thursday March 26 9:47 AM EST dailynews.yahoo.com WASHINGTON (Reuters) - The Federal Communications Commission closed bidding Wednesday in its biggest airwave auction to date, raising a net $578.7 million for the Treasury. The Local Multipoint Distribution Service (LMDS) band uses microwaves to send high volumes of information between fixed points. That makes it suitable for replacing cable television, telephone wires or Internet access, but not mobile phones or pagers. "LMDS operators have the potential of being the next serious players offering real competition in the local loop," FCC Chairman William Kennard said in a statement. "This can only lead to great things for consumers." The statement said 864 licenses were sold, of which 142 were to entities claiming rural telephone status, 30 to entities owned by women and nine to minority owned entities. It did not name the winners. "Potential bidders have been waiting for years for the LMDS opportunity," FCC Wireless Telecommunications Bureau Chief Daniel Phythyon said. "Now it is up to the marketplace to determine the best use for these raw materials of competition." Government budget analysts had estimated proceeds of $500 million from the LMDS auction. The government's take might have been higher but the FCC revised its bidding rules for the LMDS sale after several high-profile winners in the $10.2 billion 1996 personal communications services auction declared bankruptcy. The auction was divided into large and small capacity license rights in each of 493 distinct markets around the country. The FCC previously granted the large capacity license for New York City to a private firm, Cellular Vision, but auctioned another high capacity permit for some of the surrounding suburbs under the heading "New York, NY." Most companies that won licenses are initially expected to offer telephone and high-speed Internet connections to small- and medium-sized businesses, but once the networks are up and running residential customers will get linked as well. The wireless bandwidth provided by a single LMDS license could carry 16,000 phone calls, vast amounts of computer data or 200 television channels, FCC officials said. Deregulation of the cable and telephone industries has thus far failed to stimulate much competition to provide residential services, so the FCC is increasingly looking to new mechanisms for breaking the grip of local monopolies. To ensure competition gets off the ground, the FCC prohibited local telephone and cable companies from owning LMDS licenses in their current service areas for three years. The companies are permitted to hold up to a 20 percent stake in a company that owns a license or to own licenses outside their areas. (Reuters/Wired)

To: Zorro who wrote (4856)	3/26/1998 12:01:00 PM
From: Zorro	Read Replies (2) \| Respond to of 5812

Low bids for spectrum may reduce value for others By Jessica Hall Wednesday March 25, 9:21 pm Eastern Time biz.yahoo.com NEW YORK, March 25 (Reuters) - The government's auction of radio wave spectrum brought lower bids than Wall Street expected, which could reduce the perceived worth of spectrum already held by companies such as WinStar Communications Inc. (WCII - news) and Teligent Inc (TGNT - news), analysts said. ''The government has dumped so much spectrum on the market in the past few years. The economics of supply and demand say it's like buying a patch of sand in a desert. Sand may be valuable someday, but right now there's still a really big desert,'' said David Roddy, chief telecommunications economist with Deloitte & Touche Consulting Group. The U.S. Federal Communications Commission raised a net $578.7 million for the U.S. Treasury in the auction for the rights to the Local Multipoint Distribution Service (LMDS) band of spectrum, which uses microwaves to send high volumes of information between fixed points. Government budget analysts had estimated proceeds of $500 million from the LMDS auction, but some industry watchers expected bids to run much higher. ''It will be interesting to see how the market reacts to this (the auction bids)...there are discrepancies between the value of the bids and the value attached or embedded in the stock prices of WinStar and Teligent,'' said Jack Reagan, an analyst with Legg Mason. ''They are still excellent, excellent companies. But they are fully valued now.'' WinStar and Teligent, among a new breed of companies using advanced digital wireless technology to provide voice and data services, have seen sharp increases in their stock prices in the past few months. WinStar has gained 75 percent to 43-9/16 since the end of 1997, while Teligent has risen about 34 percent to 33. WinStar was among the leading bidders in the LMDS auction, along with WNP Communications, a private firm backed by seven venture capital funds, Nextband Communications, owned by Nextel Communications (NXTL - news) and Craig McCaw's Nextlink Communications (NXLK - news). Some of WinStar's existing spectrum may now been seen as fully-valued or overvalued when compared with the prices paid in the recent auction, several analysts said. WinStar did not return calls seeking comment. Larry Winfield, a vice president with wireless and broadband consultancy Hardin & Associates, said the value of the spectrum remains to be seen. ''What is spectrum really worth? Spectrum does not have an actual worth. The PCS auction went at extremely high prices. Those who paid that are going out of business. For LMDS, it depends on what they build, the markets they have and their strategy. It remains to be seen,'' Winfield said. The LMDS winners are seen as potential challengers to the entrenched local telephone and cable television monopolies. But costly network build-outs, other new competitors and customer uncertainty pose problems, analysts said.